Nasdaq set to rebound but Dow called lower after IBM shocker

Wall Street looked set for a mixed open as investors digested a 23% plunge in IBM shares, another jump in oil prices and the start of the second-quarter earnings season.

Dow Jones futures were down 281 points, or 0.5%, while S&P 500 futures were 0.1% lower. Nasdaq futures were pointing higher, up 0.6% after a sell-off in technology stocks at the start of the week.

Yesterday saw the Nasdaq tumble 1.6% to 25,873 as higher oil prices and weakness in chipmakers weighed on sentiment, with the S&P 500 dropping 0.8% to 7,515 and the Dow slipping 0.3% to 52,499 .

On Tuesday morning, US benchmark WTI crude is up 2% at $79.60 a barrel, having topped $81 earlier.

This escalation follows a third consecutive night of US strikes on Iran and after President Donald Trump announced a renewed blockade of Iranian shipping and proposed a 20% fee on Iranian cargo passing through the Strait of Hormuz.

Iran rejected the move, while the UAE said Iranian missiles had struck two oil tankers transiting the waterway.

Attention now turns to June’s US inflation report, which could shape expectations for interest rates, before earnings season begins in earnest.

JPMorgan Chase, Bank of America, Goldman Sachs, Wells Fargo and Citigroup kick off the US bank earnings season before the opening bell.

IBM shares plunged more than 23% in premarket trading after the technology group’s preliminary second-quarter results showed revenue growth slowed to 1%, with a 7% decline in infrastructure sales offsetting gains in software.

The company reported revenue of $17.2 billion, while operating earnings per share rose 5% to $2.93 and year-to-date free cash flow reached $4.8 billion, but investors focused on the weaker top-line performance and pressure on margins.